The Inflation Reduction Act is cruising toward passage in the House, even after tax reform centrist Democrats said was vital for their support was left out.
Democrats who wanted to lift the $10,000 cap on state and local tax deductions said they would still support the $740 billion budget reconciliation bill that passed the Senate along party lines Sunday, lifting any serious roadblocks it could face in the House.
MANCHIN AGREEMENT WOULD SET 15% CORPORATE MINIMUM TAX
Reps. Josh Gottheimer (D-NJ) and Mikie Sherrill (D-NJ), who previously said they would not be supporting a spending bill that didn’t loosen the SALT cap, put out statements supporting the Democrats’ signature healthcare and climate reform legislation.
“I am proud to have beat back Republican efforts to once again try to pay for legislation on the backs of the New Jersey taxpayer,” Sherrill tweeted Monday. “Sen Thune (R-SD) tried to use SALT to pay for a fix to the Inflation Reduction Act, but I steadfastly refused to support that.”
Gottheimer said Sunday that “ss for SALT, my line in the sand remains the same. If someone tries to change the tax rates on families in my District, I will insist that we restore the State and Local Tax Deduction” but will also vote for the legislation.
One centrist Democrat told the Washington Examiner that he doesn’t expect to see pushback on the bill at all from the House.
Itemized deductions mostly benefit higher earners, which is why the SALT cap was cut, according to Garrett Watson, senior policy analyst at the Tax Foundation.
“This outcome was likely driven by concerns that loosening the SALT cap mostly benefited higher earners who itemized their taxes and owned high-value property, which went directly against the rhetoric of policymakers seeking to instead raise taxes on higher earners,” Watson said. “Despite this setback for the SALT caucus, I expect further attempts to loosen the cap between now and when the cap expires at the end of 2025.”
Language on SALT was previously a critical component for lawmakers from high-tax states such as New York and New Jersey, with the group previously demanding its inclusion in a reconciliation bill.
While progressives previously had hoped for a broader bill, one senior Democratic aide told the Washington Examiner that Democrats don’t expect any substantial opposition to the climate-related legislation despite one source close to Sen. Joe Manchin noting that the West Virginia centrist sees the bill as a win for the oil and natural gas industry.
Key progressive members quickly voiced support for the bill, including Progressive Caucus Chairwoman Pramila Jayapal (D-WA).
“This bill will lower costs for working people, take climate action, expand access to health care, cut the cost of prescription drugs, and more,” she tweeted. “It’s time for the House to do our part & get this bill to President Biden’s desk.”
Rep. Ro Khanna (D-CA), another progressive member, also tweeted that the legislation “is an historic investment in climate that will create millions of jobs & save families around $1,800 per year on their energy bills. Let’s get this bill to [President Biden’s] desk.”
Senate Majority Leader Chuck Schumer (D-NY) said at a press conference following the IRA’s final vote that having the full support of Senate Democrats would inspire House Democrats to fall in line.
“When all of the 50 Democrats in the Senate vote for the bill, including the progressive wing, you know, Bernie [Sanders] and Elizabeth [Warren] and Eddie Markey and people like that, and the more conservative wing, I think it’s going to set a tableau for the House,” Schumer said Sunday. “That will make it much easier for the House to pass.”
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The bill’s expected passage comes as Democrats look to score a sizable win as they face an uphill battle in retaining the majority in the lower chamber in November, with members throughout the conference praising it as a legislative win they can tout back home as they face continued attacks from Republicans on the economy.
“The Senate passed the Inflation Reduction Act! It will lower the cost of healthcare, prescription drugs, everyday goods, & tackle the climate crisis. Americans deserve a break — that’s why Tom will vote to pass this bill in the House later this week,” Rep. Tom Malinowski, a vulnerable Democrat up for reelection in New Jersey, tweeted.
The House is expected to vote on the legislation Friday.
